China’s Semiconductor Production Surges by 40% in Q1, Consolidating its Dominance in the Market

On April 22, according to the latest data released by the National Bureau of Statistics of China, the semiconductor production in the country skyrocketed by 40% in the first quarter, signaling the increasingly dominant position of mature process chips in the Chinese market.

In March alone, the national integrated circuit production reached a staggering 36.2 billion units, a year-on-year increase of 28.4%, setting a new historical record.

This remarkable growth can be attributed to the strong demand from downstream industries such as new energy vehicles. In the first quarter, the production of new energy vehicles in China surged by 29.2% to reach 2.08 million units, while smartphone production also saw a growth of 16.7%.

Mainland China widely adopts mature process semiconductors of 28 nanometers and above in various fields such as automotive, with the country currently accounting for 29% of global production capacity. While advanced processes like 7nm are not extensively used, China’s semiconductor production facilities have been rapidly expanding across the country in recent years, almost tripling the production output in the first three months of this year compared to the same period in 2019.

Some researchers have pointed out that one of the unexpected consequences of the U.S. export controls on advanced chip technology to China could be a wave of investment supported by the country resulting in oversupply, potentially leading to China dominating the global production of traditional chips.